WILLEMSTAD – Banks and other financial institutions supervised by the Central Bank of Curaçao and Sint Maarten (CBCS) must immediately freeze assets when they determine that a customer or other relationship is covered by applicable international sanctions.
The requirement is detailed in a new CBCS document setting out how supervised institutions must respond to United Nations, European Union and other targeted financial sanctions.
Institutions are required to continuously determine whether sanctions apply to their customers, participants or investments. When a match is established, the relevant prohibitions and obligations must be implemented immediately.
That can include freezing funds and other economic resources without delay.
Institutions must also ensure that frozen assets are not made available, either directly or indirectly, to the sanctioned person or organization. Providing prohibited financial services must similarly be prevented.
The rules apply when a financial institution establishes what the CBCS describes as a “hit” — a situation in which the identity of a business relationship matches a person or entity covered by sanctions regulations.
In Curaçao, such a match must immediately be reported to the CBCS using the sanctions reporting form provided by the central bank. Supporting documents, including identification documents relating to the person involved, must accompany the report.
The procedure differs slightly in Sint Maarten. Institutions there must immediately report a sanctions hit to the Financial Intelligence Unit of Sint Maarten, which subsequently informs the CBCS.
There can also be a second reporting obligation.
If a sanctions hit qualifies as an unusual transaction under Curaçao’s legislation on reporting unusual transactions, the institution must also report the transaction to FIU Curaçao. In Sint Maarten, the corresponding reporting obligation applies under that country’s anti-money laundering and terrorist financing legislation.
The obligations illustrate the role banks and other supervised businesses are expected to play in preventing sanctioned individuals and organizations from accessing the financial system.
The CBCS says sanctions are intended to restrict the operational capacity of specifically designated individuals and entities. These can range from terrorist organizations and their members to senior individuals or parts of foreign governments.